Rammazzotti, Inc $\begin{array}{ll}\text { Unit sales for } 2018 & 26,000 \\\text { Unit production for } 2018 & 26,000\end{array}$

question 60

Multiple Choice

Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Rammazzotti Inc., had the following budgeted data: $\begin{array}{ll}\text { Unit sales for } 2018 & 26,000 \\\text { Unit production for } 2018 & 26,000\end{array}$
$\begin{array}{l}\text { Budgeted fixed overhead for } 2018 \text { : }\\\begin{array}{lr}\text { Supervision } & \$ 800 \\\text { Depreciation } & 2,000 \\\text { Rent } & 100\end{array}\end{array}$
$\begin{array}{lr}\text { Budgeted variable costs per unit: } & \\\text { Direct materials } & \$ 0.15 \\\text { Direct labor } & 0.20 \\\text { Supplies } & 0.02 \\\text { Indirect labor } & 0.05 \\\text { Power } & 0.02\end{array}$
$\text { The following actually occurred: }$
$\begin{array}{ll}\text { Actual unit sales for } 2018 & 24,000 \\\text { Actual unit production for } 2018 & 28,000\end{array}$

$\begin{array}{l}\text { Actual fixed overhead for } 2018 \text { : }\\\begin{array}{lr}\text { Supervision } & \$ 850 \\\text { Depreciation } & 2,000 \\\text { Rent } & 100\end{array}\end{array}$

$\begin{array}{lr}\text { Actual variable costs: } & \\\text { Direct materials } & \$ 3,500 \\\text { Direct labor } & 4,900 \\\text { Supplies } & 530 \\\text { Indirect labor } & 1,250 \\\text { Power } & 470\end{array}$
The total budgeted costs for 2018 were

• A)$11,440.
• B)$13,510.
• C)$14,340.
• D)$13,460.

Understand the cash budgeting process, including the calculation of necessary financing.

Grasp the concept and application of zero-based budgeting.

Analyze and prepare production budgets based on sales forecasts and inventory requirements.

Calculate cash collections and understand the impact of credit sales on cash flow.

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Definitions:

Population Parameters

Numerical characteristics that describe certain aspects of a population.

Y-intercept

The value of the dependent variable in a linear equation when the independent variable is zero, representing the point of intersection with the y-axis on a graph.

First Order

In mathematics and science, a concept indicating the most immediate or primary in sequence, often used to describe equations, reactions, or effects that involve only the first power of a variable or are of the first degree.

SSE

Sum of Squared Errors; the total squared difference between each observed value and its corresponding predicted value in regression analysis.